Diageo price hikes pile more pressure on hospitality

The price of a pint of Guinness is set to increase from February in the Republic, with Northern Ireland likely to follow suit given the rising costs being experienced by Diageo,

The drinks giant, whose brands also include Rockshore, Carlsberg, Harp, Hop House 13 and Smithwicks, confirmed that it will increase the price it charges for draught beer by 12 cents (about 10p) a pint from February 1.

In a statement, Diageo said: “Like many businesses in Ireland, we are facing significant inflation in input costs across our operations.

“We have absorbed these costs for as long as possible but unfortunately, we can no longer continue to do so.

“As a result, we have written to our customers in the on-trade to advise them of an increase on our draught beer list prices of 12 cent per pint, exclusive of VAT.

“The price change will be applied across the whole Diageo draught beer range and will take effect from February 1 2023.”

The statement made no reference at this stage to increases in Northern Ireland.

The hike comes after Heineken announced in November that it was increasing the price of its kegs by 9%, equating to an additional 17c plus VAT on the price of a pint.

In a tweet, the Vintners’ Federation of Ireland said the increase was “very bad news for the pub trade, on the back of energy costs, inflation and threat to VAT 9%.”

CEO Paul Clancy said: “Following the increase in Heineken prices in December, this is the second major price increase our members are having to deal with in a few short weeks. Publicans are getting hammered from every angle at the moment and this news from Diageo is a further blow to the trade.

“We’re heading into the quietest few months of the year for the trade so the increase in the price of a pint couldn’t come at a worse time.”

Commenting on the increase announcement, Taoiseach Leo Varadkar said it will not in itself put any pubs out of business, but in conjunction with other costs will lead to financial hardships for many.